The legal expense insurers have had some success in the Court of Appeal in the case of Christine Brown-Quinn & Webster Dixon LLP & Ors v Equity Syndicate Management Ltd & Motorplus Ltd  EWCA Civ 1633. This was an Appeal from the High Court of Justice on 21 October 2011.
It was concluded that policy holders retained their freedom of choice but insurers are only obliged to pay the appropriate non-panel rates to their insureds. The insurers can seek to limit the costs for which they are liable to the insured, provided that the freedom of choice guaranteed by the European directive is not rendered meaningless. If the insureds want to pay more to their solicitors and arrange some other way to make such payment, that will then be their decision.
At paragraph 29, Lord Justice Longmore said: “A court determining whether the remuneration offered by the insurance policy is so insufficient as to render the insureds freedom of choice meaningless would have to have evidence of such insufficiency before it could avoid or strike down any provision in an insurance contract relating to the level of costs and expenses payable in respect of a solicitor’s services.”
Lord Justice Longmore went on to say that “We were not directed to any evidence before the judge that solicitors (other than Webster Dixon) were not prepared to conduct the cases of the insureds for the non-panel rates of £125 (rising to £139) per hour.”
The Appeal concluded: “I would therefore set aside the order of the judge and declare that the defendant insurers are obliged to pay the appropriate non-panel rates to their insureds but no more.”
Click to read the complete decision.